Internet Cafes Lose The Battle In North Carolina

The life of Internet cafes in North Carolina went by the weigh-side last week when the state Supreme Court ruled that the 2010 ban in Internet cafe sweepstakes game was constitutional. That ruling dealt a death blow to an industry that had become a major source of tax revenue in the state.

The cafe industry had launched a series of legal challenges to the 2010 ban, and the first few rounds were won by the industry. The state Court of Appeals and the Superior Court both ruled that the ban was unconstitutional. The Supreme Court, however, had the final say in the matter, and overturned the lower courts’ rulings.

With D-Day (January 3rd) around the corner for the Internet cafes, it appears as though the industry will disappear shortly after the new year. For those cafes that remain open, they risk criminal charges if authorities decide to raid the establishments.

The Supreme Court ruling may be a popular one amongst lawmakers who helped create the ban, but for the players and the owners of the cafes, it is a nightmare. Thousands of jobs are expected to be lost, and hundreds of thousands of dollars will be sucked out of the economy.

While many cafes will close their doors, others will remain open because they feel they have made the necessary software adjustments to comply with North Carolina law. The Supreme Court did briefly address the software in its ruling, but the overwhelming opinion is that all sweepstakes games at the cafes are illegal.

The ruling comes at a time when the US, as a whole, is starting to take a harder look at Internet gambling regulations. Nevada, Delaware, and New Jersey have all passed laws regulating the industry, with a handful of other states expected to discuss the issue in 2013. Nevada has already started the licensing process, and hopes to have online casinos operational by the Spring.